Securities & Exchange Commission Closes Inquiry Into Overstock.com

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Overstock.com (NASDAQ:OSTK) announced today that the Salt Lake City office of the SEC notified them that it is not recommending any enforcement action against the company.

The following was reported:

“I know that the SEC has an obligation to look into allegations it receives about any company — even when those allegations are false,” said Patrick Byrne, Overstock.com’s chairman and chief executive officer. “I believe that this inquiry was initiated, and persisted, because of false allegations made by a cohesive group of short sellers and a few financial journalists who dutifully serve them. In this case, I believe these folks fomented the SEC investigation against Overstock.com then tried to claim that the existence of an SEC investigation was evidence of wrong doing. We knew that was false.”

I don’t know the SEC’s threshold for an enforcement action, and I don’t know exactly what they examined relative to Overstock’s financial reporting. I am quite sure that Byrne and company will portray that as though the company is completely exonerated.

Just as in the case of Usana Health Sciences (NASDAQ:USNA), that’s not exactly true. When the SEC decides to end an informal investigation or not take enforcement action, it doesn’t mean the company in question has done no wrong. It simply means the SEC isn’t pursuing the matter.

Is this a good development for Overstock? Sure. A company would rather NOT be under investigation. Does it mean the company’s troubles are over? Of course not. It is still a horribly run company that can’t turn a profit, and one which provides misleading and inaccurate financial disclosures to Wall Street. Eventually, something’s got to give.

31 thoughts on “Securities & Exchange Commission Closes Inquiry Into Overstock.com

  1. Patch

    Tracy, you are too funny. What you don’t realize is that when you engage in a scheme to destroy and are proven to be inaccurate in your scheme it trickles through to all of your credibility. You are a horrible forensic accountant that was just exposed for being conflicted in your analysis.

    I expected no different iresponse from you in your announcement of this news “It is still a horribly run company that can’t turn a profit, and one which provides misleading and inaccurate financial disclosures to Wall Street”.

    I hope you keep accusing them of fraud. It will be nice to see if they turn around and sue you for making false and misleading accusations.

  2. Tracy Coenen

    Hilarious comment Dave Patch. I’m so happy to have your opinion of my forensic accounting work. I’m not aware of anyone proving me “inaccurate”. I’m not aware of any scheme. And I’m not aware of “being conflicted” in my analysis.

    I stand by everything I’ve said about Overstock and Byrne, including my opinions that their disclosures are incomplete, inaccurate, and misleading.

  3. Craig

    Great job on OSTK. Just imagine, all three of you can’t mount a credible rebuttal. What joke. I think you ought rethink your strategy, along with your inept buddies. Try accounting 101 from video professor. Its a good course.

  4. Patch

    Tracy, have you or have you not accused Overstock of accounting fraud? Yourself, Sam, and Gary Weiss find it most amusing to spin out all this bogus analysis and accusations against the accounting standards of Overstock. Suddenly none of it is proven to be accurate from those that regulate such disclosures. That implies you are proven inaccurate. Sam, he was feeding all his garbage directly into teh SEC and they basically said “sorry, don’t buy it”.

    As for your personal opinion on the business operations, never thought you were intelligent enough to hold responsibility on profit and loss. Have you ever held such responsibility in your career?

  5. Craig

    I hope your clients, if you have any, are taking note of your pathetic discourse on the OSTK matter. Have you been paid to write negatively on this subject? That is what it sounds like. It is time to report you to the Assoc. of Certified Fraud Examiners, and see what your peers have to say. Bye, Bye……..

  6. Tracy Coenen

    Well why didn’t you just SAY you don’t understand what this situation means. This means that the SEC isn’t going forward. It’s not a clean bill of health for OSTK. It doesn’t mean there aren’t accounting shenanigans. It just means the SEC chooses not to continue investigating. You’ll have to ask them why. I don’t know for sure.

  7. Tracy Coenen

    Am I supposed to be afraid of a bogus report about me to a professional organization? What are you going to say… “She thinks that Overstock has irregularities in its financial statements and makes misleading disclosures. And I don’t want her to think that!”

    Have you nothing better to do than harass me? Obviously.

  8. Craig

    Come now, have we hit a raw nerve. As an outsider watching the three stooges, you, Weiss and Antar, all on the same page? Posting one after the other. People are not stupid. Let your peers judge for themselves about all your postings and senseless ranting. I think when they see all the posts from the stooges, see the timing of them, some within minutes of each other, they are going to ask you some hard questions. Lets see how you handle the pressure. Bye, Bye…..and by the way, I think you are way out of your league…

  9. Tracy Coenen

    Are you suggesting that I’m prohibited from coming to the same conclusion as others on various things or from linking to their blogs and opinions?

  10. Judd Bagley

    I’m not of the opinion that Tracey is a criminal. I do think she’s highly suggestible, obsessive and saddled with a bit of a persecution complex (all of which makes her a convenient tool for true criminals such as Gary Weiss and Sam Antar).

    In other words, we should feel pity, not scorn toward Tracey.

  11. Craig

    I am not suggesting that you change your thought process, nor provide linkage to other sites. However, if you were an impartial observer, as I am, no one in their right mind would believe you re your independent posting. Certainly, you have conversed either by phone, or email with Weiss, and Antar and have coordinated your postings. An idiot can see that. So lets stop the semantics and start realizing that you are supposed to be held to a higher standard and if you are wrong in your assumptions about a specific issue then say it and go on with your life, or go find another one of the thousand true frauds in the pink sheet area. I can point you to a number of them. Why don’t you try doing things a bit differently and be a true professional?

  12. Patch

    No tracy that would never happen. The problem arises when you all come to common conclusions, repeat them near daily in hatchet reports, and all be wrong.

    I guess I am at a loss as to how you and Antar and Weiss can write near daily about a company’s financials that only come out quarterly and each refer to each others BS. Clearly from all outside it looks like a very concerted effort and now an effort that was blatantly wrong. One can also question the motivation of such energy and harassment of one public company when there are thousands out there and many who have profitability struggles like Overstock. I don’t see you talking about the airlines or automakers who operate at a loss.

    Tell us tracy, what started the obsession with overstock? An obsession you can’t give up even when the SEC disagrees with you.

    BTW…did you hear that Gary Weiss was outed by Wikipedia for sockpuppeting even afer he blogged all that time that it was not him using that alias and they proved otherwise. Real class act that guy.

  13. Tracy Coenen

    Ah…. we have returned to conspiracy theories, and taking orders, and Sith Lords and such? That must be it. The grand conspiracy! We’re busted!!!

    LOL – This stuff would be funny if it wasn’t silly. No one knows whether the SEC agrees or disagrees with me. They are purposely tight-lipped about their investigations, revealing virtually nothing about what they were looking at, what they were looking for, and why they chose to close a matter.

    I realize that Byrne and his supporters will pretend that somehow this is a complete exoneration for Overstock. Believe that if you like. Others understand how the process works and that the closing of a matter doesn’t mean the company has a clean bill of health.

    I say let Byrne and his clowns continue to manipulate the financials and their disclosures. Frankly, it’s pretty entertaining. And anyone who disagrees with my analysis and opinions of the financial statements is free to do so in this wonderful country of ours!

  14. Tracy Coenen

    Re: “near daily” writing about OSTK

    There are 89 posts on this blog that use the word Overstock. Most are about Overstock, some are not and mention them as a side issue. My first post about OSTK was a year ago. That’s not even close to daily.

    Re: writing about other companies

    No matter WHICH company I write about, someone will always deem another company or another industry or another issue more deserving of the negative attention. With that in mind, I’d rather just write about whatever I choose to write about. It is, after all, my blog.

    🙂

  15. Craig

    Lets get down to specifics. Do you know and converse with Antar, or Weiss?
    Why would a professional allign himself/herself with a previously convicted felon? Do you think that association will further your career? Why did you choose OSTK to bash, or was it brought to your attention by someone else?
    Be honest in your answers.

  16. Tracy Coenen

    Why do you think that I owe you or anyone else answers to those questions? Who I associate with and why is no one’s business, and I am under no obligation to disclose any of that to anyone.

  17. lenofus

    How come your pals like Herb, Darl, Rash, all these guys, come after me, and want to know my background, and you won’t cough yours up? I really don’t care, but how come the two standards?

    And, if you really had any talent, why don’t you put it toward the real problems in markets and economys. If OSTK were the biggest bunch of criminals that ever walked the face of the earth, If Patrick Byrne did one fifth the things you say he did, they all wouldn’t amount to a pimple on an elephant’s behind. But you have the standard bearers of Broad and Wall levering themselves, and the system, to 33:1, you have them defrauding cities, States, counties, lil’ ole ladies, the postal service, the IRS, the Boy Scouts, Girls Scouts, Boys and Girls Clubs of America, and all you can do is blather on about the Sith Lord.

    I’ve got some news for you, Cupcake. There really is a Sith Lord. As you see the Feds and IRS agents rip through PGT Bank, Liechtenstein, Switzerland, Curacao, they’ll work right up to him. Because years ago, the Feds said to an at the time Director of one of these companies, “we have to get the top guy. If we dont’, they’ll keep doing it.” If you look at the Fails data from the SEC, you’ll see, they still do it. I don’t know who he is: but somebody does. This game is about over.

    Want not join us, oh exaulted one? Forget about Overstock, and let’s get Wall St. to trade fairly. Then, you’ll have accomplished something. And when the music stops, you’ll look pretty silly hanging (-: with the folks whom you’re currently dancing .

    Oh. Almost forgot. Don’t bet against the fax machine, either.

  18. bigoptrnr

    It seems very strange that Darl J. Dumont posts announcements of fresh content of your blog as well as that of Weiss and Antar within a few seconds of each other on Investor Village and that the content of those 3 blogs is almost identical.

  19. Tracy Coenen

    Lenofus – Why would the questions others ask you be of any concern to me? And what are you suggesting I’m not “coughing up” about my background? My background is detailed throughout my site.

    Now if you’re referring to my clients… I have confidential consulting engagements with clients. I’m not going to release their names, nor tell you what I’ve been asked to consult about, nor tell you how much I’ve been paid. Because they’re confidential.

    As for Sith Lords and such… You see there may well be a Sith Lord somewhere bringing destruction to Wall Street. That is a completely separate issue from Overstock being a piece of shit. All I’ve concerned myself with so far is Overstock, the shitty company, with a shittier business that can’t turn a profit, and one of the shittiest CEO’s in America. My criticism of the company’s false and misleading disclosures have nothing to do with any Sith Lord.

    In case you haven’t notice, Patrick Byrne is a complete clown who offers hours and hours of entertainment with his public rantings. And dissecting all their misleading disclosures and material misstatements is actually quite interesting. Quite frankly, Patrick Byrne and his joke of a company make for quite entertaining blog material.

    Now if you’re suggesting that some anti-Sith Lord wants to engage me to consult with them, all I need is an engagement letter and a retainer, and I’ll happily consider it.

  20. Mirror

    Dave Patch wrote; “Suddenly none of it is proven to be accurate from those that regulate such disclosures. That implies you are proven inaccurate. Sam, he was feeding all his garbage directly into teh SEC and they basically said “sorry, don’t buy it”.

    By this logic Patrick Byrne has been proven wrong about Gradient.

  21. Bruce Thompson

    Gee Tracy,

    The SEC was in OSTK files for two whole years at your and your cohorts request. Patrick welcomed them with open arms and hid nothing, They found nothing to substantiate your bogus claims after all that time.

    You have been outed for what you are. You have also lost every shred of credibility you may have had,

    Give it up. You lost and your current tirade just looks silly.

  22. Tracy Coenen

    The SEC has never received any request from me. And you’re mischaracterizing the no action letter. It doesn’t mean they found nothing. It means they’re not moving forward. And yes… I’ve been outed… as a forensic accountant who doesn’t like false and misleading disclosures by public companies. How horrible!

    🙂

  23. Craig

    Why don’t you just stop your pathetic blog, and find another job. Who in the hell will listen to you after this debacle. You do not know what you are talking about, are completely wrong, and have damaged the reputation of people and companies that you have posted about. I think it is high time, you move on. Go write another book like Weiss, that never sells, or give speeches like Antar that obviously no one listens to. It is also time for you to be examined for your lack of ethics in these senseless rants and posts which have no basis except you jaundiced opinion, which no one cares about.

  24. Tracy Coenen

    LOL – If no one cares or listens, how on earth would I have damaged anyone’s reputation?

    I find it interesting that you can say I’m “wrong’ about everything, but you raise not one substantive issue on which you think I’m “wrong” and offer a rebuttal. It’s much easier to scream “you’re wrong” and stomp off than it is to actually raise a real issue and discuss its merits.

    Your time here has run out. Thanks for participating.

  25. Patch

    Trtacy, EXACTLY. “It’s much easier to scream “you’re wrong” and stomp off than it is to actually raise a real issue and discuss its merits.”

    Unfortunately you scream on false innuendo and present it as factual. The fact that nobody outside of short biased hedge funds, gary weiss,sam antar, and yourself believe that Overstock has committed accounting fraud is irrelevant to you. even after a relative clean bill of health on reporting standards by teh SEC you are still unwavering on your accusations. why? What makes you the all knowledge in this? Why the obsession with this one sinular company with thousands out there?

    FWIW…Both Gary the sock puppet and Sam the criminal linked up to you latest. What a highly ethical crowd of associates you have.

  26. Tracy Coenen

    There you go Dave. All you can say is “everyone disagrees with you.” I haven’t talked to “everyone,” and I suspect you haven’t either. So we really don’t know who agrees with me and who doesn’t.

    This isn’t a popularity contest for me. It’s about facts and figures. The numbers and the disclosures Overstock puts out are materially misleading, in my opinion.

    You obviously can’t argue a point either. All you can say is “you’re wrong and everyone knows it.” You really ought to try arguing a point and backing up your point with some actual facts and support. That would go much further than just trying to insult me and my work. Your time is up here as well.

  27. Peter

    Tracy what facts and figures are you defending? I would like to understand what it is you found to be false and misleading that the Securities and Exchange Commission did not.

  28. Tracy Coenen

    Peter Landis – You’ve been following this blog for quite some time, so I’m sure you’re well aware of what I believe to be misleading on the part of Overstock. If you can’t remember, type overstock into the search box toward the top of the page and start reading. THAT’S what I find false and misleading, and as I’ve already stated, we don’t know if the SEC agreed that it was misleading or not. We just know that for whatever reason, they’ve chosen to not move forward.

  29. somtnman

    Seems to me the market value is all the “rebuttal” one needs. And that is about a third of where the shares were at the peak and alost exactly where they closed ($28.34) on the day of the Sith Lord call. Since then:

    NFLX: = +98 PERCENT
    NILE: + 93 PERCENT
    MOX INTERNET INDEX: PLUS 87 PERCENT.

    Oh, I know., shorts: NFLX and NILE are regulars on the SHO list. So that’s the same, too. But neither Hastings nor Vadon uses it as a crutch.

    2007 cash flow from operations…

    OSTK +9.8mm (DOWN FROM +25.4m IN 2004)
    NFLX: +291.8m (V. 147.6M IN 2004)
    NILE: : +41.5m (V. 19.8m IN 2004)

    The basics: Pat is bad at running a fundamentally easy business. Quite aside from whether his revenue recognition moves revenue from one quarter into another, which has always been a minor issue.

    The market is a voting mechanism when Dave Patch is involved, and ultimately a weighing mechanism that drowns him right out.

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